Foreclosure starts fell to their lowest levels since November as nationwide mortgage loan performance remained largely stable in May, despite pockets of concentrated weakness deepening early in 2026, according to ICE Mortgage Technology.

That landed foreclosure starts, which eased to roughly 33,000, about 9% below April levels and 35% below May 2019, ICE reported.

The mortgage servicing and data analytics provider called a 15-basis-point rise in the national delinquency rate in May to 3.5% — a month that ended on a Sunday — “largely calendar-driven rather than a reflection of underlying credit stress.”

But ICE also noted persistent weakness worth watching, particularly ongoing pressure on borrowers with government loans insured by the Federal Housing Administration (FHA).

About 184,000 more mortgage borrowers were 90 days late or in foreclosure in May compared to a year ago, up from 154,000 in March. May’s increase represented the largest annual spike in the company’s data since early 2020, when COVID-19 work shutdowns caused unemployment to surge.

“The bulk of the rise continues to be driven by FHA loans, with the share of FHA loans 90-plus days past due or in active foreclosure up 1.9 percentage points from a year ago,” noted ICE. Seriously delinquent loans backed by the Department of Veterans Affairs were 0.3 percentage points higher, while Fannie Mae’s and Freddie Mac’s 90-day delinquency rates declined.

After FHA serious delinquency rates began climbing steadily at the start of the year, Ginnie Mae, a government-run corporation that securitizes government-insured loans, reported in April that it had changed its reporting requirements to exclude loans put on trial payment plans after pandemic-era emergency loss mitigation options expired in October.

The seasonally adjusted serious delinquency rate for FHA-insured single-family loans was 6.79% in April, according to the latest Ginnie Mae data, down from 6.84% in March.

Compared to 3.55% in October, the overall 90-day FHA delinquency rate was 5.76% in April, which includes “loans under active consideration for loss mitigation foreclosure avoidance,” Ginnie reported.

On an optimistic note, ICE said new defaults of FHA loans are running about 8% below year-ago levels since March, which it called the strongest annual decline across mortgage channels. They are up about 8%, meanwhile, for Fannie- and Freddie-eligible loans.

Loan vintage performance discrepancies also intensified in May, as distressed loans originated following Federal Reserve interest rate hikes in early 2022 made up 39% of May foreclosure starts, 34% of active foreclosure inventory and 43% of foreclosure sales.

That’s their highest shares to date across all foreclosure stages, said ICE, “as borrowers who purchased in the higher-rate environment with limited subsequent home price appreciation represent a growing share of distressed mortgages.” FHA borrowers often use a downpayment of 3.5% or less, further limiting equity they hold at time of purchase.

Foreclosure inventory was 34% higher over the year at the end of May, but foreclosure sales were flat overall at 7,000.